Deal Is Key to The Development of Yuan Market in Switzerland

ZURICH—The Swiss National Bank and People's Bank of China have agreed to set up a currency swap line designed to boost trade and investment between the two countries, joining a parade of countries hoping to become offshore hubs for trading the yuan.

The Swiss and Chinese central banks said Monday that the three-year agreement will allow them to buy and sell their currencies up to a limit of 150 billion yuan, also known as renminbi, or 21 billion Swiss francs ($23.4 billion). Such swap lines allow central banks to buy...